Restriction enzymes belong to a larger class of enzymes called nucleases. These are of two kinds; exonucleases and endonucleases. Exonucleases remove nucleotides from the ends of the DNA whereas, endonucleases make cuts at specific positions within the DNA. Each restriction endonuclease functions by ‘inspecting’ the length of a DNA sequence. Once it finds its specific recognition sequence, it will bind to the DNA and cut each of the two strands of the double helix at specific points in their sugar-phosphate backbones. Each restriction endonuclease recognises a specific nucleotide sequences in the DNA.

Restriction endonucleases recognise:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Palindromic nucleotide sequences in DNA
Option (1) Palindromic nucleotide sequences in DNA — Correct. Each restriction endonuclease recognises a specific palindromic sequence of nucleotides in DNA, one that reads the same on the two strands in the same direction (5′ to 3′), and cuts the DNA there.
Option (2) Recombinant nucleotide sequence in RNA — Incorrect. They act on DNA, not RNA, and the sequences are palindromes.
Option (3) Recombinant nucleotide sequences in DNA — Incorrect. Recombinant DNA is what is made after cutting and joining DNA; it is not what the enzyme recognises. A restriction endonuclease recognises a specific palindromic sequence in the DNA.
Option (4) Palindromic nucleotide sequences in RNA — Incorrect. The sequence is palindromic, but it lies in DNA, not RNA. Restriction endonucleases act on DNA and cut it at their recognition sequence.
Note: The passage is taken from NCERT. NTA has put lines of the NCERT text together to make it. Most CUET (UG) questions come straight from NCERT, so study the book line by line, including figures and their titles.
NCERT Extract:
Restriction Enzymes – “… Each restriction endonuclease recognises a specific palindromic nucleotide sequences in the DNA. … These are groups of letters that form the same words when read both forward and backward, e.g., “MALAYALAM”. As against a word-palindrome where the same word is read in both directions, the palindrome in DNA is a sequence of base pairs that reads same on the two strands when orientation of reading is kept the same.”